Business as usual: The rotten state of party fundraising in Canada

iPolitics Insights

René Lévesque used to say that of all the legislation adopted by his government, including the Bill 101 language law and the referendum enabling bill on Quebec independence, he was proudest of Bill 2, the campaign finance reform passed in 1977.

Bill 2 banned election donations by corporations and trade unions, and limited individual donations to $3,000. It became the template for campaign finance reform in Ottawa and other provinces. But nearly four decades later, in Quebec and other jurisdictions, we are reminded by the news cycle that there are loopholes and other subversive ways around campaign finance rules.

In Quebec, companies were circumventing the spirit of the law from the beginning, with executives donating through family members and employees, reimbursing them and covering their tax bills. The Charest government lowered the limit on donations to $1,000 in 2011 and Quebec lowered it again to only $100 in 2013 in light of disclosures at the Charbonneau Commission investigating corruption in the province’s construction industry.

Last month, the Quebec police anti-corruption unit arrested 70 people, including former deputy premier Nathalie Normandeau, on corruption and influence-peddling charges. One of those arrested was Marc-Yvan Côté, a former cabinet minister and Liberal bagman famous for driving money around in the back of his car. At the Gomery Commission over a decade ago, it came out that Côté accepted $120,000 in cash donations which he personally disbursed to federal Liberal candidates in eastern Quebec. He was banned for life from the Liberal Party of Canada by Paul Martin, but continued to organize and raise money for the Quebec Liberal Party.

It turns out Côté lobbied Sam Hamad as economic development minister in the Charest government in 2012 on behalf of Premier Tech, an international environmental services company with some 3,000 employees in Rivière-du-Loup, which received an $11 million loan and an $8 million government grant.

Four years later, the story caught up to Hamad, who has resigned as treasury board president in the current Liberal government. Premier Philippe Couillard has been unlucky in his timing of late. The anti-corruption arrest sweep just happened to occur on budget day. And Hamad’s resignation came on the second anniversary of Couillard’s election.

But Quebec has nothing on Ontario, which has been called the Wild West of campaign fundraising. The Toronto Star and the Globe and Mail have been outdoing one another in exposing abuses practised by the Liberal government of Kathleen Wynne. In Ontario, corporate donations and personal donations are capped at nearly $10,000.

Premier Christy Clark has no plans for campaign finance reform. Her governing Liberals raised $10 million in 2015, half of it from corporations. She claims to be in the dark about all this. That’s a whopper.

Last week alone, the Ontario Liberals raised $3 million at the premier’s Heritage Dinner, where $18,000 would put you at the Victory Table. The premier and ministers also have hosted private fundraisers at $10,000 a plate. Some ministers also have fund-raising quotas of up to $500,000 a year.

The Globe recently reported that the Bank of Nova Scotia hosted “a $7,500 a plate fundraiser for energy minister Bob Chiarelli and Finance Minister Charles Sousa promoted by an executive of one the banks that ran the privatization of Hydro One the previous month.” So, one of the banks that did the IPO of a provincial utility hosted a fundraiser for the two ministers responsible for it.

Then it turns out the Ontario Liberals raised $1.2 million for a byelection in Whitby-Oshawa. The legal limit for the byelection was just over $140,000, so the remaining $1 million reverted to the party. (While money buys access, it apparently doesn’t buy votes; the Liberals lost the byelection by double digits.)

The Ontario Conservatives say Liberal poll numbers have been cratering since these stories started breaking a couple of weeks ago. Which may be the reason that Wynne, initially indifferent to the campaign finance issue, now plans legislation in the spring sitting of the legislature to ban corporate and limit personal donations. She also has cancelled her private premier’s dinners.

In British Columbia, Premier Christy Clark has no plans for campaign finance reform. Her governing Liberals raised $10 million in 2015, half of it from corporations. She claims to be in the dark about all this. “I couldn’t confirm for you which events cost how much,” she said the other day.

That’s a whopper. No politician attends any fundraiser where she doesn’t know exactly how much people are paying for tables and VIP cocktails.

Clark’s justice minister recently hosted a dinner for 30 at $2,000 a head. Justice ministers and their departments write laws and regulations, they appoint judges and name outside counsel for the government.

Which brings us to the $500-per-person fundraiser featuring federal Justice Minister Jody Wilson-Raybould and hosted by the Bay Street law firm of Torys LLP at its Toronto office on Thursday night. The federal justice minister also appoints judges, names outside counsel and receives representations from law firms on behalf of their clients.

After the sponsorship scandal, Jean Chrétien brought the first campaign finance reform to Ottawa in 2003 by limiting corporate and union donations to $1,000 and capping personal donations at $5,000, including party leadership campaigns. And this was a guy who used to host private fundraisers at 24 Sussex organized by the Liberal party’s Laurier Club. Later, one of Stephen Harper’s signature pieces of legislation was the 2006 Federal Accountability Act, which banned corporate and union donations altogether and limited individual donations to $1,100, now just over $1,500.

Prime Minister Justin Trudeau brushed off questions about the Toronto fundraiser starring his justice minister. “We do not permit unions, we do not permit corporate donations,” he said last Wednesday. “The fact is, individuals have very strict limits as well on how much they can donate.”

Tell us something we don’t know. Appearances matter. This appears to be business as usual. If there’s a way around the spirit of the law, money will still find it.